The active utilization of bioenergy resources could be one of the main solutions to strengthen energy security in Ukraine. The potential of biomass that Ukraine currently has for energy generation is about 30 million tons of equivalent fuel per year. Utilization of this potential will allow Ukraine to replace 6 billion m3/year of natural gas until 2020 and reduce greenhouse gas emissions by 11 million tons СО2-equiv./year. A share of biomass and waste in total consumption of primary energy in 2030 could reach 10%, today it is only 0.7%. For comparison, the same figures in EU are on average 6.2%, and in some countries: Latvia – 24.4%, Sweden – 21% Finland – 20.7%, Austria – 15.5%, Denmark – 14.5 %.
“The green tariff for generation of electricity from biomass is a positive step forward for the enabling schemes to be developed and apart from being expanded to cover more biomass options (such as biogas, gasification etc), the tariff should be retained, as should the existing waiver on VAT (through 2019) and custom duties (no set term) on imported equipment and zero profit tax for sold electricity through 2020. The extension of the green tariff until 2035 will ensure investors that these benefits will be applied to all qualified bioenergy schemes”, stresses Dave Young, Chairman of EUEA.
“Ukraine has a tremendous amount of readily available and harvestable biomass supply, which, if properly utilized, can be a major contributor to its energy security. The end-consumer can benefit from low-cost energy from domestic renewable sources instead of expensive and ever increasing imported fossil fuels. However, Ukraine lacks a clear market strategy to accomplish these goals and does not provide support, either legislative or financial, to investors in the sector. For example, there is no inflation adjustment to the minimal green tariff, which has a considerable negative effect on high feedstock and operating cost biomass power production investment performance. It will also be a significant positive step to have a preliminary off-take or PPA that can be used for leverage to secure foreign direct investment”, claims Edward Klaeger, a member of EUEA Board, Chief Executive Officer of Alter Energy Group.
Land use issue is one of the pillars for bioenergy development in Ukraine. A specific land designation for the use of biomass for energy crops would remove a lot of bureaucratic barriers that any biomass developer faces at the moment. Leading biomass and bioenergy exporters, such as Brazil (leader in bioethanol exports) develop national standards for land for biomass to ensure land for biomass does not compete with land for food as it is a major requirement for sustainability certification systems.
“Currently, biomass occupies a significant place in energy balance of other countries. 12,8% primary energy in the world is generated from renewable energy recourses, the lion’s share of which is biomass – 9,9% primary energy in the world. Since 1991, the energy consumption of renewable energy resources in EU has increased twice and in 2009 it comprised about 153 million tons of oil equivalent/year or 9% of general EU27 energy consumption. Energy from biomass amounts to 107,1 million tons of oil equivalent (70% from all renewable energy)», states Georgiy Geletukha, Director of SEC “Biomass”.